KB Kookmin Bank has issued a $100 million blockchain-based dollar-denominated digital bond. It marks the first case of a domestic bank applying blockchain technology to actual foreign currency financing.
Kookmin Bank said Tuesday that it issued the two-year, $100 million digital bond through a private placement in the Hong Kong market. The issuance rate was set at the risk-free Secured Overnight Financing Rate (SOFR) plus 0.4 percentage point. HSBC served as the sole bookrunner, and the issuance was carried out using HSBC's digital asset platform, Orion.
A digital bond processes the entire issuance, registration, trading, and settlement process using blockchain technology. Through this issuance, Kookmin Bank shortened the settlement period from the existing five business days to three business days. "It allows us to streamline procedures and reduce settlement default risk compared with conventional bond issuance methods," a Kookmin Bank official said.
This issuance is part of the digital finance transformation being pursued by KB Financial Group. "It is significant in that it is a case of applying blockchain technology to actual fundraising," Kookmin Bank said.
